- July 14, 2020
On July 9, 2020, the Supreme Court agreed to hear an appeal that could significantly reframe potential liability under the Telephone Consumer Protection Act (“TCPA”). The TCPA generally prohibits calls made to a cell phone using any automated telephone dialing system (ATDS) or an artificial or prerecorded voice without prior express consent. Violations of the TCPA carry statutory penalties of $500, or up to $1,500 for a willful violation. Many TCPA claims are brought as class actions which multiplies potential exposure for violations.
Last week, the Supreme Court agreed to take an appeal addressing a central issue: what is an ATDS? The TCPA provides this short definition: (1) The term “automatic telephone dialing system” means equipment which has the capacity (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers. 47 USC § 227 (a)(1). Although the term is defined in the statute enacted in 1991, the definition has spawned years of litigation and federal appellate courts have reached sharply different conclusions on its reach.
The facts alleged in the case to be addressed by the Supreme Court, Facebook, Inc. v. Duguid, No. 19-511, are familiar to any smart phone user. Duguid received several text messages from Facebook, alerting him that his Facebook account had been accessed by an unknown device. The twist is that Duguid did not have a Facebook account and had not consented to text messages; he likely had a recycled number associated with another Facebook user. Duguid filed a class action in California against Facebook seeking statutory penalties, alleging that Facebook sent text messages to his cell phone using an ATDS.
The district court dismissed the case, agreeing with Facebook that the allegations suggested direct targeting, rather than a call placed by a random or sequential number generator. On appeal, the Ninth Circuit reversed. According to the Ninth Circuit, the TCPA prohibits calls made by any device that has the capacity to store numbers to be called automatically, whether or not those numbers have been generated by a random or sequential number generator. Facebook petitioned the Supreme Court to review the decision and supplemented its petition after the Supreme Court’s ruling on July 6, 2020 regarding the constitutionality of the TCPA (addressed here) Facebook emphasized the need for the Supreme Court to address the issue to clear up the confusion across the country as a result of the current conflicting Court of Appeal decisions. The Second Circuit has joined the Ninth Circuit in interpreting the TCPA broadly, glossing over the “random or sequential number generator” requirement. In contrast, the Third, Seventh, Eleventh and D.C. Circuits have rejected the Ninth Circuit’s broad interpretation, emphasizing that the “using a random or sequential number generator” is a key clause in the statutory definition that cannot be ignored. As the latest courts to address the issue have recognized, if the Ninth Circuit’s broad ruling is correct, every smart phone is an ATDS and any text to a cell phone without express consent exposes the unwitting caller to TCPA liability and statutory damages.
The Supreme Court will address this important TCPA issue in its next term which begins in October.
Victoria Collado is a partner in the firm's Litigation Group and Co-Chair of the firm’s Class Action Defense Group, with significant experience defending companies against consumer class actions and individual actions. Victoria may be contacted at email@example.com or (312) 840-7048.